How To Improve Your Credit Scores To Qualify For Mortgage

This Article Is About How To Improve Your Credit Scores To Qualify For Mortgage

There are many ways How To Improve Your Credit Scores To Qualify For Mortgage. It is not too difficult and many times, just applying a few simple techniques can do wonders. The team at Gustan Cho Associates are experts in helping our clients rebuild and boost their credit scores.

We have helped countless clients rebuild and reestablish their credit after bankruptcy. Most of our clients we helped have credit scores higher than 700 FICO in less than one year after the bankruptcy discharged date. You do not need to hire expensive credit repair companies to fix your credit. All credit disputes that are non-exempt need to be removed during the mortgage process.

Credit repair often does more damage than good for borrowers trying to qualify for a mortgage.

Credit Disputes During Mortgage Process Is Not Allowed

Remember that credit disputes are not permitted during the mortgage process:

  • All credit disputes with any credit reporting agencies need to be retracted if borrowers intend on applying for a mortgage loan
  • However, for those who just filed bankruptcy or had a recent foreclosure and are starting a credit repair program, whether it is done on their own or by hiring a credit repair company, there are things they should know how certain derogatory credit deletions can affect the mortgage process
  • There are ways of improving credit scores also by simply paying down credit card balances and obtaining new credit
  • One of the most effective ways of boosting credit scores is by getting three secured credit cards with a $500 credit limit on each secured credit card
  • Each secured credit card can boost credit scores by at least 20 or more points
  • Some have seen their credit scores increase as much as 100 points with just three secured credit cards in a matter of just a few months
  • Remember to keep credit card balances below the 10% balance limit for maximum optimization
  • Another thing to need to keep in mind is that high balances on credit cards will lower credit scores

How Derogatory Items Affect Credit Scores

By reducing a revolving credit account balance below the 10% credit limit can improve credit scores by 10 to 30 points for consumers who have multiple open revolving credit accounts. For those with only 2 or fewer revolving credit accounts, reducing credit account balance below the 10% credit balance limit will improve credit scores by 15 to 40 points.  A recent collection account can drop credit scores by 50 to 70 points.

Outstanding collections and/or charged-off accounts do not have to be paid to qualify for owner-occupant primary home loans. As the outstanding and/or charged-off accounts age, it has less of an impact on consumer credit scores.

Impact Of Late Payments On Credit Scores

What is the impact of late payments on credit results?

A recent late payment can drop credit scores by 50 or more points. A recent mortgage payment that has been 30 days late can drop scores by 70 to 90 points. A recent mortgage payment that has been 90 days late will drop credit scores 70 to 90 points. However, as late payments age over time, they will have less of an impact on consumer credit scores.

Impact Of Short Sale And Deed In Lieu On Your Credit Scores

A recent short sale or deed in lieu of foreclosure can easily drop scores any deficiency credit scores by more than 80 points. However, as the short sale and deed in lieu of foreclosure ages, the consumer credit scores will eventually increase. A bankruptcy on a credit report can drop credit scores by 150 to 200 points. Again, as the bankruptcy ages and time passes, consumer credit scores will go back up.

Credit Repair And Re-Establishing Credit

How to fix and restore the loan

Credit and credit scores are probably the most important thing one can do after periods of bad credit or after bankruptcy and/or foreclosure. It is as important as monitoring banking accounts. Having bad credit can cost thousands, if not hundreds of thousands, of dollars in higher mortgage rates on mortgage, credit card interest payments, and insurance premiums. Many insurance companies will deny insurance for bad credit.   Others can charge substantially more in insurance premiums for having bad credit.   Many employers now check candidate’s credit during their hiring and promotional process.

Consumers who need additional credit advice, visit us at Gustan Cho Associates Mortgage News, a national mortgage, credit, and real estate informational super website.

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